Coal fight looms, Keystone-like, over U.S. Northwest

Published by MAC on 2012-10-02
Source: Reuters

Analysis: Coal fight looms, Keystone-like, over U.S. Northwest

By Patrick Rucker

Reuters

23 September 2012

WASHINGTON  - Call it the Keystone of coal: a regulatory and public relations battle between environmentalists and U.S. coal miners akin to the one that has defined the Canada-to-Texas oil pipeline.

Instead of blocking an import, however, this fight is over whether to allow a growing surplus of coal to be exported to Asia, a decision that would throw miners a lifeline by effectively offshoring carbon emissions and potentially give China access to cheaper coal.

Having long ago lost their bid to prevent the extraction of fossil fuels, environmental groups aim to close transport routes that bring those carbon fuels to market, pulling local and state politicians into the fight alongside regulators.

Mining interests won a battle last week when the Army Corps of Engineers called for a quick study of plans to open the first coal port on the west coast at Oregon's Port of Morrow on the Columbia River, a review that will weigh impacts of hauling coal, not burning it.

Coal port skeptics say the ruling is ripe for challenge in the courts and they foresee a drawn-out fight over the review.

"I'm afraid that by choosing to perform a less stringent analysis today, the Corps will ultimately create a longer delay," Oregon Senator Ron Wyden said in a statement. Wyden, who is due to lead the Energy and Natural Resources Committee if Democrats hold the Senate, has said he supports a full review of the project and is reserving judgment until it is completed.

Delay is something miners can ill afford.

Alpha Natural Resources Inc, one of the country's largest coal producers, said last week it is cutting 1,200 jobs, roughly 9 percent of its workforce, as increased use of natural gas for power generation dents demand.

While coal foes in the Pacific Northwest can stymie the projects, the federal government will have the final say.

If President Barack Obama wins a second term, the issue will likely test his determination to curb the use of fossil fuels blamed for climate change, especially since his policies are partly behind miners' yearnings for Asian markets.

Tough new Environmental Protection Agency limits on power plant emissions are often blamed, along with low natural gas prices, for the drop in domestic coal use, but burning the black rock in Asia will have the same impact on the atmosphere.

No matter who wins the election, the intensifying fight ahead over coal ports is raising Keystone-like questions about energy priorities in a time when traditional fuels are still abundant.

Coal Abounds

About 40 percent of the country's coal comes from the Powder River Basin - a high, grassy plain in eastern Wyoming and Montana where the black fuel runs in seams near the surface.

With nearly 9 percent of U.S. coal furnaces set to go dark in the next four years and more utilities moving to natural gas, the 100 billion tons of coal still locked in the region need to reach new markets or face being frozen in the ground.

A Pacific Northwest coal port would aid mining giants such as Arch Coal and Peabody Energy Corp that dominate the basin and are in a worldwide race to meet Asian demand.

The United States holds the world's largest coal reserves, but China, with the world's third-largest share, is tapping more of its own reserves and boosting imports from Australia, Indonesia and even Colombia as its economy continues to grow. India, too, is hungry for coal.

U.S. coal exports have more than doubled in the past two years to reach a record nearly 29 million tons in the first three months of the year.
Roughly a quarter of that already heads to Asia, mostly via Gulf Coast ports.

Analysts say Powder River Basin coal must cheaply reach Asia in the coming years to catch the strong demand in China, the world's No. 2 economy, and the rest of the region.

"The United States has no unique advantage in meeting the Asia coal hunger, and that demand will not exist forever," said Ailun Yang, a researcher with the World Resources Institute.

Regulatory Fight

Last week's decision by the Army Corps was an important victory for miners since the big impacts of coal use will not be studied.

The Army Corps, which received more than 30,000 comment letters about the Port of Morrow plans, said on its website that it generally conducts narrow reviews, "in this case, the construction of the dock facility."

But the narrow study envisioned by the Army Corps could yet morph into a sweeping review if officials have a change of heart in light of a huge public outcry or if the courts step in.

Feeding Chinese furnaces with U.S. coal could add hundreds of millions of tons of carbon dioxide to the atmosphere, a cause of climate change that Obama has pledged to fight and one that anti-coal activists want considered by the Army Corps.

"They have to consider not just moving the coal but burning it," said Nathaniel Shoaff, an attorney with the Sierra Club, which wants officials to consider climate-change concerns before writing rules on shipping or issuing permits to mine federal land.

Those who oppose coal want the Army Corps to halt the handful of coal port plans until it studies the impact on the climate, a process that could take years.

Legal Issues

In a courtroom the fight could center on a reading of the National Environmental Policy Act from 1970, which requires federal agencies to study "all major federal actions that significantly affect the quality of the human environment."

Courts now expect climate-change consequences to be weighed under NEPA, so the question is how much Obama or his successor wants to consider the external costs associated with developing and burning coal, says Mark Squillace, who leads the natural resources law center at the University of Colorado.

"There is no doubt that officials have the authority, and I would say obligation, but it's not clear what will be the policy," he said.

Arch Coal and Peabody declined to comment about the coal port project.

If the Port of Morrow project is thwarted, miners may have luck at one of the handful of other projects on the table.

In the state of Washington, just north of Oregon, the governor has been more receptive to the idea of allowing coal shipments from the Longview docks.

Supporters of the coal port plans say they are prepared for a war of attrition against those who would stand in the way of energy companies'
finding markets for U.S. energy abundance.

"Before the Civil War, (battlegrounds) like Antietam and Gettysburg were mostly unheard of," said Bill Kovacs, a senior energy advisor with the U.S. Chamber of Commerce, which is lending help to the mining sector.

"Now the fight for a sensible energy policy is being fought on the same scale in places like the Port of Morrow and Longview."

(Editing by Jonathan Leff and Prudence Crowther)

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Northwest Tribes say no short-cuts for coal export proposals

Joint press release. Distributed in conjunction with the Coast Salish Gathering and Association of Washington Tribes

27 September 2012

Mission, Oregon: Faced with the possibility of impacts to human health, natural resources and economies, leadership of Northwest tribes today called on the U.S. Army Corp of Engineers to conduct a full environmental analysis for all six proposals to transport and export coal through their shared lands and waters.

Today's action arose from the Northwest Tribal Coal Summit organized by the Association of Washington Tribes and the Coast Salish Gathering in conjunction with the Affiliated Tribes of Northwest Indians' fall convention hosted by the Confederated Tribes of the Umatilla Indian Reservation.

Driven by exploding Asian demand and declining domestic consumption of coal, export proposals have sprung up at Oregon and Washington ports. Six proposals call for transporting Powder River Basin coal from Montana through Indian and non-Indian lands in the Northwest via rail and barge.

Tribal communities are expressing grave concern about the health and safety impacts from environmental dangers of coal dust.

"Along the Columbia River it's cliff, highway, railroad, then river. Our communities are wedged between the railroad and the river. We've got nowhere to escape," said Paul Lumley, Executive Director of the Portland-based Columbia River Inter-Tribal Fish Commission. "If we cannot escape, neither will the coal."

The Tulalip Tribes expressed their concern both environmentally and economically. Tulalip is one of the largest economic engines in the region, along with Boeing. The Tulalips say that an increase in rail traffic along the I-5 corridor to as many as 18 trains a day will bring traffic in the area to a halt, blocking access to businesses, hospitals and fire stations.

"The risks not only to our tribe can be devastating, but also to the entire county," said Mel Sheldon, Chairman. "We've made substantial retail investments that depend heavily on quality of life, and we have collaborated with local citizens to restore and protect our watersheds. We are tracking this carefully, and plan to express our decision on this new threat in the near future."

Tribal leaders were addressed by Colonel Anthony Funkhouser, Commander of the Northwest Division of the U.S. Army Corps of Engineers, whose agency has federal permitting authority over coal export terminals through the Clean Water Act and Rivers and Harbors Act. The Corps of Engineers announced last week they would conduct an Environmental Assessment rather than a more rigorous Environmental Impact Statement on the Port of Morrow proposal for a new export coal terminal.

"We don't want the minimum protection any longer, we're used to getting the minimum", said Brooklyn Baptiste, Vice-Chairman of the Nez Perce Tribe. "We deserve the maximum attention and expect the lead and coordinating agencies to provide the full environmental studies on all ports, as they will be making one of the largest decisions impacting human health, the environment and economies of not only our tribal communities, but of our neighboring citizens of the Northwest."

Kathryn "Kat" Brigham, member of the Confederated Tribes of Umatilla Board of Trustees, urged tribal leaders to reach out to neighboring communities, "they have something at risk too."

In addition to full environmental assessment the today's resolution passed by the fifty-seven member tribes of ATNI called for full transparency and government to government consultation throughout the entire decision making process the local, state, and federal levels.

"We believe the Northwest is interconnected through the families, resources and waterways, that these coal terminals and railway routes should be addressed in a holistic manner," expressed by Chairman Brian Cladoosby, Swinomish Tribe. "If a coal train or tanker were to spill on the route or in the river at Port Morrow in Oregon, the water ways will carry the pollution throughout the Northwest, and coal dust will be carried through the mountains in the air we all breath. "

Billy Frank Jr., Chairman of the Northwest Indian Fish Commission added, "The idea of a half-dozen new coal export terminals in western Washington and Oregon -- and the hundreds of trains and barges running from Montana and Wyoming every day to deliver that coal -- would threaten our environment and quality of life like nothing we have seen before. Coal may be a cheap source of energy for other countries, but these export facilities and increased train traffic would come at a great cost to our health, natural resources and communities."

For more information contact:
Debra Lekanof, Swinomish Indian Tribal Community (360) 391-5296
Julie Carter, Columbia River Inter-Tribal Fish Commission (503) 238-0667